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2020 (9) TMI 806 - Tri - Companies LawSanction of Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT - The Official Liquidator has filed his report dated 20th February, 2020 inter alia, stating therein that the affairs of the Transferor Company have been conducted in a proper manner - From the materials on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. Since all the requisite statutory compliances have been fulfilled, Petition is made absolute in terms of prayer in the Petition.
Issues:
1. Sanction of Tribunal sought for Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013. 2. Compliance with statutory requirements and observations of the Regional Director. 3. Fairness and reasonableness of the Scheme. 4. Official Liquidator's report on the Transferor Company's affairs. 5. Order of the Tribunal and directions for compliance. Issue 1: Sanction of Tribunal for Scheme of Amalgamation The Petitioner Companies sought Tribunal's sanction for the Scheme of Amalgamation between the Transferor Company and the Transferee Company, along with their respective shareholders. The rationale behind the merger was to simplify the group structure, minimize administration costs, and pool resources for better management. The Board of Directors approved the Scheme in meetings held on 21st January, 2019, with an appointed date of 1st April, 2018. The Court, convened via videoconference, heard the Authorized Representative for the Petitioner Companies, and no objections were raised against the Scheme. Issue 2: Compliance with Statutory Requirements and Regional Director's Observations The Petitioner Companies filed the Company Petition in accordance with Sections 230 to 232 of the Companies Act, 2013. The Regional Director's Report, dated 25th August, 2020, stated that except for certain observations, the Scheme was not prejudicial to shareholders or the public. The Petitioner Companies provided necessary undertakings to comply with accounting standards, the appointed date, and Section 232(3)(i) of the Act. The Regional Director's observations regarding compliance with RBI requirements and protection of creditors' interests were addressed by the Petitioners, who affirmed serving notices to the RBI and clarified that creditors' rights would not be affected by the Scheme. Issue 3: Fairness and Reasonableness of the Scheme After reviewing the materials on record, the Tribunal found the Scheme fair, reasonable, compliant with the law, and not against public policy. Consequently, CP No. 967/MB-I/2020 was made absolute as per the prayers in the Petition, and the Scheme was sanctioned with the appointed date fixed as 1st April, 2018. The Scheme was deemed binding on all parties involved, including shareholders, creditors, and employees. Issue 4: Official Liquidator's Report The Official Liquidator's report, dated 20th February, 2020, confirmed that the affairs of the Transferor Company were conducted properly, further supporting the approval of the Scheme. Issue 5: Order of the Tribunal and Compliance Directions The Tribunal's final order allowed the Petition subject to specific conditions, including the dissolution of the Transferor Company without winding up, filing necessary documents with the Registrar of Companies, compliance with undertakings, publication of Scheme approval in newspapers, and taking all statutory steps as required by the Act. Interested parties were given the liberty to seek further directions from the Tribunal if necessary. This detailed analysis covers the issues involved in the legal judgment regarding the Scheme of Amalgamation sanctioned by the National Company Law Tribunal, Mumbai Bench, ensuring a comprehensive understanding of the proceedings and outcomes.
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